Amount not deductible where tax is not deducted at source
18. (1) Any amount on which tax is deductible at source under Chapter XI during the financial year shall not be allowed as a deduction in computing the total income if,-
(a) the tax has not been deducted during the financial year; or
(b) the tax, after such deduction, has not been paid during the financial year, or in the subsequent year, before the expiry of the time prescribed under sub-section (1) of section 198.
(2) However, the provision of sub-section (1) shall not apply, if the tax has been deducted during the last quarter of the financial year and the tax is paid before the due date of filing the return of tax bases.
(3) An assessee shall be allowed a deduction in respect of the amount referred to in sub-section (1) in any other succeeding financial year if,-
(a) the amount of tax deductible at source is actually paid in the other financial year; and
(b) such other financial year is not later than two financial years immediately succeeding the financial year in which tax was deductible at source under Chapter XI.
